Tax Technical – Monthly News
– January 2016 Developments –
This is a collection of developments in Australian tax law and practice that occurred in January 2016 and which aims at being of relevance to tax practioners.*
Compiled By
F John Morgan
A member of the Victorian Bar (www.FJMtax.com)
Liability limited by a scheme approved under Professional Standards Legislation
Table of Contents
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ACTS, BILLS AND ANNOUNCEMENTS
Acts, Bills & Draft Legislation
Announcements
Google to pay A$265 million (UK£130 m) in tax settlement with UK HMRC – critics say it’s too little – basis for future tax returns agreed
BEPS transparency progress: Australia signs agreement for automatic exchange of ‘Country-by-Country reports (CbC reports)
EU response to OEDC BEPS recommendations
CASES AND APPEALS
High Court
Full Federal Court
Kocharyan v FCT – taxpayer loses appeal about losses in forestry MIS investment – none of the technical appeal grounds upheld
Federal Court
Breakwell v FCT CGT: related entity debt to be included in MNAV test – not statute-barred; taxpayer loses appeal
FCT v Oswal (No 5) – Court dismisses hearing taxpayers’ testimony by video-link
Normandy Finance Pty Ltd v FCT – Payments from Vanda Gould orchestrated overseas companies to resident companies were loans, not shams
Administrative Appeals Tribunal (AAT)
Re Hughes and FCT – Pilot held to be Australian resident for tax purposes
Re Sandbach and FCT – Taxpayer fails burden of proof; interest not incurred
Re JLSP and Innovation Australia – Trial to test drug’s safety was a core R&D activity
Other Courts & Tribunals
Re Bhatti and FCT – Accountant’s work-related expenses largely disallowed
Appeals
Tech Mahindra Limited v FCT – taxpayer with P/E in Australia appeals decision that it is taxable on some of its services provided from India
Blank v FCT – taxpayer seeks leave to appeal to High Court – USD160m paid under ‘profit participation scheme’ held to be ordinary income
PFGG v FCT – taxpayer appeals decision that it was not entitled to ‘small business CGT relief’ because it was not a ‘small business entity’
COMMISSIONER’S PUBLICATIONS & NEWS
Decision Impact statements
Australian Building Systems Pty Ltd (In Liquidation) case – no s254(1)(d) retention obligation and no preference for Commissioner
Rulings
TR 2014/D1 on tax consequences of Employee Share Schemes operating outside the statutory regime – ‘Discussion Paper’ for further draft ruling
Determinations
Law Companion Guides
LCG 2015/2 – Addendum: Multinational anti-avoidance law: ATO guideline amended
Class Rulings & Product Rulings
Class and Product Rulings on 13 January 2016
CR 2016/5 – Early retirement scheme: Victoria University
CR 2016/6 – Swinburne University Academic Staff Voluntary Early Retirement Scheme 2015-16 is a s83-180 early retirement scheme
ATO Interpretative Decisions
Practice Statements
Draft Practice Statement on retrospective ‘transfer Pricing Penalties’ put on hold pending review of Chevron Case – no separate taxing power in DTA’s
General anti-avoidance Practice Statement – release of reviewed PS LA 2005/24 delayed by further consultation
Tax Alerts
Other ATO news or statements
Simplifying transfer pricing record keeping
CGT treatment of ‘‘Earn-out’s’ prior to passage of the Bill to enact the announced ‘look-through’ CGT treatment
ATO to release private company tax info in March
Car expense claims simplified to 66c per kilometer and PAYG withholding required on any allowance paid over that 66c amount
Information from insurers being used by ATO for investigation of wealthy individuals
Test case Litigation Program – ATO’s ‘reinvention’ of the program following consultation
Trust ABNs to be cancelled where no longer carrying on business
GST DEVELOPMENTS
Legislation & Announcements (GST)
Cases (GST)
Re Crown Estates (Sales) Pty Ltd and FCT – taxpayers appeal to Federal Court against decision that ITC’s could not be claimed they were ‘agents’
Rulings, Announcements, Etc (GST)
Inbound Tour Operators (ITOs) – Widely-Based Settlement Offer – ATO will refund 75% of the overpaid GST on margins up to 4 year maximum
GSTR 2012/3 – draft addendum broadening view of GST-free retirement village services in ‘serviced apartments’ – meaning of ‘single complex’
GSTD 2016/1 – GST: employer not entitled to ITC for payment of superfund’s expenses because it’s a contribution to the fund
SUPERANNUATION DEVELOPMENTS
Legislation, Announcements etc. (Super)
Cases (Super)
Ward and FCT – taxpayer appeals AAT’s decision not to re-allocate an ‘excess non-concessional’ contribution despite the resulting tax being ‘unfair’
Rulings & Other things (Super)
Accountants advising about SMSF’s must be appropriately licenced by 1 July 2016 – apply by 1 March to avoid the rush
AUSTRALIAN CHARITIES & NOT-FOR-PROFITS (ACNC) SECTOR
Annual Statement deadline 31 January 2016: 19,000 still to submit with less than a month to go and 3,200 at immediate risk of having status revoked
BOARD OF TAXATION
Voluntary Tax Transparency Code – Consultation Paper released by Board
EXTERNAL SUPERVISORS – IGT; OMBUDSMAN, JCPAA & ANAO
TAX PRACTITIONERS BOARD & LEGISLATION
Re Gylman and Tax Practitioners Board – Tax agent re-registration denied – not a “fit and proper person”
Tax (financial) advisers must register with the Tax Practice Board (‘disclaimer’ period ended) – either ‘transitional’ to 30 June 2017 or ‘standard’ now
STATE TAXES
Legislation & Announcements (State)
Cases (State)
ACT payroll tax: Comr for ACT Revenue v G Kalsbeek Pty Ltd – penalty tax for tax default affirmed – Comr wins appeal
NSW payroll tax: Chan & Naylor Australia Pty Ltd v Chief Comr of State Revenue – commonly controlled businesses, so grouping affirmed
Vic stamp duty: – Kloester v Comr of State Revenue – property purchased in parents’ names – exemptions refused
Rulings & Other (State)
OTHER DEVELOPMENTS
THE END
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